Is the door too open or too closed when it comes to population?

Commuters endure major overcrowding at Sydney's Town Hall station.Credit:Louie Douvis

Australia’s national conversation on population has reached a point where there is enough political rhetoric to fly a fleet of airships across the continent. Concerns over migration are on the rise and a feedback loop is underway, with politicians responding to community angst while at the same time fuelling some of the fears.

Whether the issue is traffic congestion, house prices, ethnic integration, foreign workers or economic growth, the national argument ends up with all eyes looking at the doorway that decides the migration intake. The obvious question: is that doorway too open or too closed?

The lesson from the recent past is that political promises are worthless where population and migration are concerned. Only the numbers count and the numbers show the emptiness of the rhetoric. Every time the federal government updates its forecasts, it admits the population is growing faster.

This is a repeated breach of faith with voters. When the Howard government first attempted to map the future, it told Australians to expect a population of 28.5 million by 2047. The latest update says it will be 35.8 million by 2045.

What few politicians can admit is just how hard it is to move the door and limit the migration intake, the biggest factor shaping the population. Without these facts, no promises matter.

Consider three options that would have to be on the table for any further cut to Australia’s permanent migration intake, which was brought down to 162,417 last year.

Option one is to divide families. The family stream takes about 47,000 people, most of them spouses who come with their Australian partners. Are some of them to be turned away? Britain did exactly this last year by setting an earnings threshold of £18,600 ($32,860) on citizens who want to bring in a spouse. “It broke my heart,” one British husband told the BBC when his Chinese wife was kept out.

Option two is to punish employers. The skilled stream takes about 111,000 people, a combination of workers sponsored by employers and those who come independently after proving they can fill a labour shortage. How low can this go? The Turnbull government toughened the rules last year by increasing visa fees and cutting the list of skills in shortage. This means the intake is already falling but every additional cut brings a risk to economic growth.

Option three is to turn away refugees. The humanitarian intake is 16,250 – and the only area in the population debate where political parties compete to go higher. Labor promises to lift this to 27,000 by 2025. The Greens want 50,000 a year. (This intake is counted separately to the permanent migration program but these are permanent arrivals nonetheless.)

The most important new factor in this debate is the release of figures from Home Affairs Minister Peter Dutton showing a fall in the permanent intake. Dutton is reviled by some for his rejection of asylum seekers who come by boat but makes no apology for his stance. He now signals a similar hard line on the migration program.

Official figures from the minister’s office show Australia’s permanent migration program shrank by 21,191 places in the year to June 30, a bigger fall than many thought possible.

This is no longer an issue where Left lines up against Right behind the usual barricades. Conservative commentators now find themselves on the same ground that union leaders staked out a few years ago when warning about rorts in the skilled migrant intake and the damage to Australian workers.

Former prime minister Tony Abbott argues for a cut to the permanent intake that is four times the size – an 80,000 reduction to an annual level of 110,000. The hard part is saying exactly who should be turned away.

New Zealand Prime Minister Jacinda Ardern, right, with New Zealand First leader Winston Peters after signing their coalition agreement. Ardern came to power with a vow to cut migrant intake.Credit:AP

The closest laboratory for this experiment is across the Tasman. New Zealand’s Labour government, led by Prime Minister Jacinda Ardern, came to power last September on a promise to cut the 70,000 annual migration program by 20,000 to 30,000 places every year.

What of the economic cost? Australian Chamber of Commerce and Industry chief James Pearson says politicians are “playing with fire” by turning away skilled workers and fuelling community doubts over migration.

“They are stoking the unfounded fears of some in the community who are being told that skilled migrants take jobs off Australians,” said Pearson. “By starving business of the skills it needs, current policy and practice puts Australian business and jobs at risk.”

Yet the economic case may not satisfy Australians who are seeing their cities and suburbs change around them.

The nation’s two biggest cities are magnets for migrants. The population of Greater Sydney grew by 102,000 in the year to June 2017, with migration making up 85,000 of the total. Melbourne grew by 125,000, including net migration of 80,000.

More than half of all the nation’s population growth is in these two big cities, with very little growth in regional Australia.

Is that sustainable? “It is certainly inevitable,” said Peter Macdonald, one of Australia’s most respected demographers and a professor at the University of Melbourne. “That’s the way the world is going – to large cities, global cities. There are some 33 cities in the world with more than 10 million people and the number is growing.”

Can infrastructure keep pace with Australia's current rate of growth?Credit:John Veage

Sydney and Melbourne are not reaching 10 million any time soon and their growth is not all grim. “There’s a lot of research about the value of large cities – the diversity of life attracts skilled people,” said Macdonald.

The key question is whether infrastructure is being built fast enough to deal with the growth. Not so far. Trams are packed, highways are choked and trains are jammed. The social cost is obvious while the financial pain is greatest for the young and the disadvantaged.

“Rapid migration and restricted housing supply are imposing big costs on people who don’t already own their homes,” the Grattan Institute warned earlier this year. “If planning and infrastructure policies don’t improve, the government should consider cutting the migration intake.”

But there is a catch in all the argument over the permanent intake. The fact is that many of the people coming into Australia are on temporary visas that give them the right to work. Many are counted in the population but they are not considered “permanent” arrivals.

The number of temporary visa holders in this country grew to about 2.1 million people last September, according to an analysis by Henry Sherrell of the Parliamentary Library. That means there are 380,000 more in Australia than there were five years earlier.

A visitor does not have to be permanent to push up rents in the suburbs around a university. Nor does he or she have to be permanent to take a job that might otherwise go to an Australian citizen.

About 160,000 of these temporary visitors are on bridging visas as they wait for permanent entry – a reminder that a cut to the permanent intake can mean someone remains in the country in another category. Another 674,000 are New Zealanders. There are 137,000 visitors on working holidays – like the “backpacker tax” fruit-pickers.

Nothing highlights the pressure on the system better than the arrival of more overseas students, who gain visas that give them limited work rights and a pathway that can one day lead to permanent residency.

There are now 513,000 of these students in Australia, up from 342,000 five years ago. There is no cap on the intake.

Universities depend so heavily on the fees from these students that Australia cannot afford to break the link between the visa program and education funding. This is a reinforced steel cable that constrains any attempt to reduce the numbers, even though no political leader ever told voters that the policy settings would lead to an intake so large.

“We shouldn’t be stopping people doing higher education here – that would be calamitous for the higher education sector,” said Bob Birrell, a former Monash University researcher who now heads the Australian Population Research Institute.

“What we should do is stop the visa churning when students finish their courses.”

Many overseas students switch to other visas to stretch out their stay in Australia and get jobs while they apply for permanent residency. The government has curtailed the ability to switch to a skilled worker visa but other avenues remain.

In a global contest for talent, Australia benefits from this brain gain. But how many do we need? Is an uncapped program really sustainable? The quality concerns over higher education are already apparent as university degrees become licences to enter the country and get a job.

In New Zealand, Ardern’s pledge to reduce the migration program includes a plan to cut back on “low value” courses that are seen as a back door to permanent migration. Is this Australia’s future as well?

These are hard questions and they highlight the inadequacy of so much of the political debate. It is all very well to talk about cutting the intake but how should it be cut? To be brutal: who should be turned away?

It will take a mammoth investment in Sydney and Melbourne, beyond the current list of infrastructure projects, for the country’s two big cities to deal with this relentless increase. Unless that happens, the calls to slam the door will only increase.

Where do we want to be in the future?

How many migrants should Australia take every year? “Wrong question,” said Carla Wilshire, the chief executive of the Migration Council. She and others say the population debate should be much bigger than this.

“What we need to do is ask ourselves where we want to be in the future. What population do we need to maintain our security? Where do we want to be positioned in our region? What muscle do we need and which industries do we need to grow?” said Wilshire.

“Then we need to work out what population size we will need to maintain our standing and what skills we will need to bring in to develop the industries of the future.”

This is vital. The rise of China and the doubts over US power under Donald Trump are a reminder that Australia cannot take its security for granted. Slamming the door on migration risks the growth that underpins security over the long term.

Demographer Peter Macdonald warns against a severe cut to the intake, adding that turning away skilled workers would return Australia to the 1980s migration program, dominated by family reunion.

Australia’s strategic future is fundamental but easily lost in the political argument.

And there is no guarantee that another study is the answer. Liberal senator Dean Smith has called for a population inquiry but it looks like this idea could run for a full year, led by politicians in federal parliament, with an election right in the middle of the process.

That could be another platform for political rhetoric rather than policy action. It might even become an avenue for the naked racism that sometimes passes for debate on migration.

Perhaps Australia does not need another “national conversation” about population. What it needs is something much more difficult: a national consensus.